Target: ₹4,900
CMP: ₹4,834.40
JK Cement reported a 4 per cent year-on-year growth in grey cement volume for Q3, reaching 4.87 million tonnes. This increase was driven by expansion in the central India region and uninterrupted plant operations. The company also saw a 1 per cent quarter-on-quarter improvement in grey cement realisation, supported by higher prices and increased sales of premium products.
White cement realisation also showed positive growth as the performance in Fujairah rebounded. Northern and central region prices are currently slightly higher compared to Q3 average prices. JK Cement is optimistic about achieving a growth of 7-8 per cent in Q4FY25 and at least 10 per cent in FY26.
The company plans to invest ₹1,900 crore in capex for FY25, with an additional ₹1,900 crore earmarked for FY26. This includes ₹170 crore for the recently-acquired Saifco Cements in J&K. JK Cement aims to expand its grey cement capacity by 6mtpa in FY26, reaching a total capacity of 30mtpa. Future expansion plans include increasing capacity to about 50 mtpa by FY30, with potential locations in Jaisalmer, Muddhol, Panna, and Toshali.
While we appreciate JK Cement’s expansion into high-demand regions, we believe that the current EV/t valuation limits further upside in the stock price. Therefore, we maintain a Hold rating with a target price of ₹4,900 for March 2026, based on an EV/EBITDA of 15x.
Published on January 28, 2025
